Alcoa Inc.'s Wenatchee Works agrees to curtail production
A tentative agreement between Alcoa and Chelan County PUD would idle the Wenatchee Works plant for at least a year. The goal of the 10-year agreement is to earn enough money to build a new power generation source for the plant.
World photo/Tom WilliamsBy Laurie Smith World staff writer
WENATCHEE -- Alcoa Inc.'s Wenatchee Works would shut down for at least a year under a tentative agreement reached Tuesday with the Chelan County PUD, the PUD's general manager said this morning.
Roger Braden said the deal, which PUD commissioners were scheduled to take up this afternoon, "provides for continued compensation (of workers) and for the best opportunity for long-term employment."
During the shutdown, the PUD would remarket Alcoa's 23-percent share of the output from Rocky Reach Dam. Any profits would be used to compensate workers and develop new power sources for the 49-year-old aluminum smelter, Braden said.
Further details, such as how many workers would be paid and at what level, were unavailable at press time. Company officials deferred comment until a formal announcement set for 3:30 p.m. today at the smelter east of Malaga.
At the same time and place, PUD commissioners will meet in a special session to consider ratifying the agreement.
The goal of the 10-year contract would be "to earn enough money to build a new generation source," Braden said. The parties don't yet know what that would be.
Braden said natural gas-fired turbines that would be built and owned by the PUD "probably are at the top of the list" of options.
The shutdown probably will last for more than a year, he said, although the contract doesn't say how long.
Wayne Pretts, president of the Wenatchee Aluminum Trades Council, the workers' bargaining unit, was unavailable for comment on Tuesday and this morning.
Chelan County PUD Commissioner Bob Boyd, of Peshastin, said when everyone learns what's in the deal they will recognize it as a win for everyone.
"It's a win-win-win for the town, the county and Alcoa and the PUD, for the community, in my opinion," Boyd said. "It keeps the employment going here in the county, which we desperately need. It keeps that economic engine of that payroll moving."
Boyd said Alcoa intends to restart the plant when power can be obtained. He said the source has to be figured out within the next year.
PUD Commissioner Jim Wall, of Manson, said the PUD will be helping Alcoa find power to run two potlines. Wall said he believes that without the one-year shutdown, Alcoa would have had only enough power to run one potline, resulting in permanent layoffs.
"Don't hold me to that, but I believe that's the way it is," Wall said. "My understanding is Alcoa employees will be laid off for one year but will be paid. Some of them will be working to bring the plant back up, to upgrade it."
About 550 people continue to work at the plant after 58 senior employees in recent months took early retirements and 40 junior employees were sent home with full pay.
Alcoa has been running one-and-a-half to two potlines at the Wenatchee smelter since idling two lines early this year. The company would have to rely on Chelan County power to run the plant after agreeing last month to sell back all but 10 percent of its allocation of federal power in the region. Under the May 16 deal with the Bonneville Power Administration, the company signed over its rights to BPA power for up to two years.
Under a long-term contract that expires in 2011, Alcoa receives 23 percent of Rocky Reach power at cost.
PUD commissioners discussed the Alcoa contract negotiations behind closed doors Monday. Two of the commissioners, Gary Montague and Boyd, said Alcoa officials had cautioned that speaking publicly about the contract issues could cause serious trouble by influencing the price of aluminum.
At Monday's regular commission meeting, commissioners met with a large group of PUD staffers for about 90 minutes in a closed executive session for the stated purpose of discussing litigation. Business taken up included two other issues besides Alcoa, officials said.
Washington's Open Public Meetings Act allows government agencies to exclude the public from discussions with their lawyer about litigation or potential litigation to which the agency is likely to become a party. The act says such exceptions are to be construed narrowly.
Any issue can be said to involve potential litigation, Boyd and Montague acknowledged.
PUD General Counsel Carol Wardell said she made the call to exclude the public because of a well-documented history of lawsuits centering on long-term power sales contracts in the mid-Columbia area.
